The Importance of Rules in the LLC
Organizations need laws. Without laws, one cannot expect efficiency and effectiveness. Without laws, there is nothing more than chaos.
The same goes through with Limited Liability Companies (LLCs). LLCs are not like normal companies or corporations. However, they need to have rules and laws. Some say that LLCs give more advantages to the owners than that of other forms of organization. For one, owners or members of an LLC are not liable to any losses that the company might experience. For example, if you were an investor with a huge sum of money in an LLC, and that certain LLC went bankrupt, there is no way for you to run after the owners. That is very advantageous, indeed.
But, as mentioned learning how to form an LLC must also involve creating rules. Since you and the other members have no direct accountability and liability, the rules are necessary so that each and everyone will know their respective responsibilities.
In the making of these laws, the primary concern lies on how to incorporate the interests of the owner-members. At any rate, the rules must cover the following:
· The interest percentage of the members in the LLC
· The responsibilities and rights of every member
· Election process and the voting and vetoing powers of every member
· The proper division and resolution of problems, profits, and losses
· The management of the LLC
· Preparation and safekeeping of the LLC’s legal documents, and
· The rules in declaring and conducting a meeting
· As mentioned, without laws, any organization will likely fail. This is even truer in LLCs. Without good laws, the LLC cannot last long. It must be taken into account that each member would like to have a piece of the pie. The laws must be good enough to ensure that each and every member gets a fair share of everything.
The same goes through with Limited Liability Companies (LLCs). LLCs are not like normal companies or corporations. However, they need to have rules and laws. Some say that LLCs give more advantages to the owners than that of other forms of organization. For one, owners or members of an LLC are not liable to any losses that the company might experience. For example, if you were an investor with a huge sum of money in an LLC, and that certain LLC went bankrupt, there is no way for you to run after the owners. That is very advantageous, indeed.
But, as mentioned learning how to form an LLC must also involve creating rules. Since you and the other members have no direct accountability and liability, the rules are necessary so that each and everyone will know their respective responsibilities.
In the making of these laws, the primary concern lies on how to incorporate the interests of the owner-members. At any rate, the rules must cover the following:
· The interest percentage of the members in the LLC
· The responsibilities and rights of every member
· Election process and the voting and vetoing powers of every member
· The proper division and resolution of problems, profits, and losses
· The management of the LLC
· Preparation and safekeeping of the LLC’s legal documents, and
· The rules in declaring and conducting a meeting
· As mentioned, without laws, any organization will likely fail. This is even truer in LLCs. Without good laws, the LLC cannot last long. It must be taken into account that each member would like to have a piece of the pie. The laws must be good enough to ensure that each and every member gets a fair share of everything.
